The Australian Transactions Reports & Analysis Centre (AUSTRAC) today launched civil proceedings in the Federal Court alleging that the Commonwealth Bank failed to comply with the law on 53,700 occasions.

The allegations follow an AUSTRAC investigation into the CBA's use of intelligent deposit machines (IDMs) between November 2012 and September 2015.

The maximum penalty for each of the 53,700 contraventions is up to $18 million.

The potentially massive penalties would dwarf a $45-million fine imposed on Tabcorp earlier this year for failing to comply with anti money laundering and terror financing laws…..

The transactions in question had a total value of around $624.7 million.

The Commonwealth's allegations about the extent of the breakdown of CBA's legal obligations are breathtaking.

Reading between the lines in the statement of claim, it would appear Australian Federal Police (AFP) investigating at least four money-laundering syndicates discovered Austrac had no transaction records on those they had under surveillance.

In August 2015, CBA provided authorities with details on two of those missing transactions. Clearly, that caused panic within the bank. For just a month later, it sent Austrac details of a further 53,504 transactions dating back three years where $10,000 or more had taken place.

At least 1,604 of those late filings related to criminal gangs. Even more alarming, a further six filings related to five customers the bank itself had identified as posing a terrorism risk. But, incredibly, it didn't report them.

That is not the end of it. According to the statement of claim, the bank continued to facilitate transactions for drug syndicates even after being alerted by the AFP.

Even as late as January this year, 18 months after the breaches were first discovered, it is accused of failing to report suspicious transfers totalling $320,000 over five days.

The calamity is being sheeted home to the installation of whiz-bang new machines, intelligent deposit machines.

These accept cash or shares, count the money and then deposit it into a CBA account. From there, it can be sent almost instantly to anywhere in the world. And the neat thing, from a criminal or terrorist viewpoint, is that you do not have to be a CBA customer to do it.

Not only that, they would take up to $20,000 at a time. The machines may be intelligent but, sadly, no-one at the bank seemed to give a second thought to the reporting duties, either around the $10,000 limit or to look out for "structured" transactions — those attempting to fly just under the radar with slightly smaller amounts.

When they were first introduced in 2012, they proved popular. Almost $90 million went through in the first six months. That has since risen to around $1 billion a month.

As the debacle unfolded last week, the other banks — all of which have introduced similar machines — were keen to distance themselves from the drama, even if ANZ boss Shayne Elliott lamented that all would suffer.

Each said they had removed "non-compliant machines", whatever that means. For it is not the machines that are at fault. It is the oversight that has failed.

Interestingly, each of the CBA's three main rivals were keen to emphasise that their machines would accept a maximum of $5,000. In effect, that means no single transaction would ever come close to the reporting limit, thereby letting them off the hook……

The odds on a royal commission have now shortened dramatically, for the Turnbull Government's resolve to resist one must now be spent.

Not only that, the banks have lost any moral ground they may have thought they had in opposing the Federal Government levy.

If recent history is anything to go by, the bank and its leaders merely will attempt to pretend it is all a media beat-up and it is business as usual.

There will be the usual contrite statements, the promises of improving systems to ensure there is no repeat, an internal inquiry no less, most likely as early as this week when Mr Narev unveils a $9.8 billion profit.

This time, however, the attack will not be so simply to parry. It is not an angry but disorganised customer base baying for blood. These are issues of national security and the prospect of a concerted legal assault by the Australian Government solicitor.

Commonwealth Bank of Australia notes the media coverage of the civil penalty proceedings initiated yesterday by AUSTRAC for alleged non-compliance with the Anti-Money Laundering and Counter-Terrorism Finance Act 2006. The matter is subject to court proceedings. We are currently reviewing AUSTRAC’s claim and will file a statement of defence. We will keep the market informed of any updates in compliance with our disclosure obligations.

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Moggy Musings

Hi! My name is Boy. I'm a male bi-coloured tabby cat. Ever since I discovered that Malcolm Turnbull's dogs were allowed to blog, I have been pestering Clarencegirl to allow me a small space on North Coast Voices.

A false flag musing: I have noticed one particular voice on Facebook which is Pollyanna-positive on the subject of the Port of Yamba becoming a designated cruise ship destination. What this gentleman doesn’t disclose is that, as a principal of Middle Star Pty Ltd, he could be thought to have a potential pecuniary interest due to the fact that this corporation (which has had an office in Grafton since 2012) provides consultancy services and tourismbusiness development services.

A religion & local government musing: On 11 October 2017 Clarence Valley Council has the Church of Jesus Christ Development Fund Inc in Sutherland Local Court No. 6 for a small claims hearing. It would appear that there may be a little issue in rendering unto Caesar. On 19 September 2017 an ordained minister of a religion (which was named by the Royal Commission into Institutional Responses to Child Sexual Abuse in relation to 40 instances of historical child sexual abuse on the NSW North Coast) read the Opening Prayer at Council’s ordinary monthly meeting. Earlier in the year an ordained minister (from a church network alleged to have supported an overseas orphanage closed because of child abuse claims in 2013) read the Opening Prayer and an ordained minister (belonging to yet another church network accused of ignoring child sexual abuse in the US and racism in South Africa) read the Opening Prayer at yet another ordinary monthly meeting. Nice one councillors - you are covering yourselves with glory!

An investigative musing: Newcastle Herald, 12 August 2017: The state’s corruption watchdog has been asked to investigate the finances of the Awabakal Aboriginal Local Land Council, less than 12 months after the troubled organisation was placed into administration by the state government. The Newcastle Herald understands accounting firm PKF Lawler made the decision to refer the land council to the Independent Commission Against Corruption after discovering a number of irregularities during an audit of its financial statements.The results of the audit were recently presented to a meeting of Awabakal members. Administrator Terry Lawler did not respond when contacted by the Herald and a PKF Lawler spokesperson said it was unable to comment on the matter. Given the intricate web of company relationships that existed with at least one former board member it is not outside the realms of possibility that, if ICAC accepts this referral, then United Land Councils Limited (registered New Zealand) and United First Peoples Syndications Pty Ltd(registered Australia) might be interviewed. North Coast Voices readers will remember that on 15 August 2015 representatives of these two companied gave evidence before NSW Legislative Council General Purpose Standing Committee No. 6 INQUIRY INTO CROWN LAND. This evidence included advocating for a Yamba mega port.

A Nationals musing: Word around the traps is that NSW Nats MP for Clarence Chris Gulaptis has been talking up the notion of cruise ships visiting the Clarence River estuary. Fair dinkum! That man can be guaranteed to run with any bad idea put to him. I'm sure one or more cruise ships moored in the main navigation channel on a regular basis for one, two or three days is something other regular river users will really welcome. *pause for appreciation of irony* The draft of the smallest of the smaller cruise vessels is 3 metres and it would only stay safely afloat in that channel. Even the Yamba-Iluka ferry has been known to get momentarily stuck in silt/sand from time to time in Yamba Bay and even a very small cruise ship wouldn't be able to safely enter and exit Iluka Bay. You can bet your bottom dollar operators of cruise lines would soon be calling for dredging at the approach to the river mouth - and you know how well that goes down with the local residents.

A local councils musing: Which Northern Rivers council is on a low-key NSW Office of Local Government watch list courtesy of feet dragging by a past general manager?

A serial pest musing: I'm sure the Clarence Valley was thrilled to find that a well-known fantasist is active once again in the wee small hours of the morning treading a well-worn path of accusations involving police, local business owners and others.

An investigative musing: Which NSW North Coast council is batting to have the longest running code of conduct complaint investigation on record?

A which bank? musing: Despite a net profit last year of $9,227 million the Commonwealth Bank still insists on paying below Centrelink deeming rates interest on money held in Pensioner Security Accounts. One local wag says he’s waiting for the first bill from the bank charging him for the privilege of keeping his pension dollars at that bank.

A Daily Examiner musing: Just when you thought this newspaper could sink no lower under News Corp management, it continues to give column space to Andrew Bolt.

A thought to ponder musing: In case of bushfire or flood - do you have an emergency evacuation plan for the family pet?

An adoption musing: Every week on the NSW North Coast a number of cats and dogs find themselves without a home. If you want to do your bit and give one bundle of joy a new family, contact Happy Paws on 0419 404 766 or your local council pound.